FINANCIAL BY DENISE NORBERG-JOHNSONNORBERG-J OHNSO N is a former subcontractor and past president of two nationalconstruction associations. She may be reached at ddjohnson0336@sbcglobal.net. ISTOCK

Several years ago, author and marketing expert Bernice Kanner published the
results of her survey for the Bloomberg
organization in a small book, “Are You
Normal About Money?” She found a
wide range of attitudes about money and
some surprising facts about what people
were willing to do for more of it. For $1
million, two-thirds of survey respondents would live on a deserted island
for a year, and 30 percent would serve
six months in a medium-security prison
for a crime they didn’t commit. For $10
million, 25 percent would abandon their
friends, work in prostitution for a week,
or change their race or sex. Seven percent would even commit murder.

What is it about money that produces these kinds of responses? Part of
the problem, according to author and
magazine editor Lewis Lapham, is that
people just want more of it. Regardless of
their income, he discovered, “a depressing number of Americans believe that if
only they had twice as much, they would
inherit the estate of happiness promised
them in the Declaration of Independence.” No one ever has enough, and
the accumulation of wealth becomes
more important than enjoying what has
already been accumulated.

Think about how this underlying
attitude permeates your business decisions. It is hard to resist growing revenue,
even though you know that there is an
ideal size for your company. When you
are able to serve your customers well
because you have the capacity to complete their projects on time and deliver
the quality they expect, you also find a
level of profit that allows you to reinvest
in assets and support your own lifestyle.

Even when the company is generating itsoptimal amount of profit at the perfectannual revenue level, the pull of “moreis better” may entice you to consider thatnext leap in volume.

Rationally, we recognize that money
is simply an exchange medium that
assigns value to goods and services. It
has no intrinsic value, but emotionally,
it represents a level of security that we
equate with happiness. At the same time,
we despise its power to control our lives
and create stress. In our society, wealth is
a measure of success, and business decisions can be so driven by profit that the
original vision and mission of the company is almost forgotten.

In the United States, we have an
uneasy truce with debt. Credit card balances are higher than ever, savings levels
are evaporating, and mass media marketing over the last several decades has
convinced consumers that they require
things formerly considered luxuries. We
are a culture of spenders.

In China, on the other hand, being
frugal predated the communist era by
thousands of years. The classic Chinese
text “Dao De Jing” lists frugality, along
with love and generosity, as one of the
three greatest treasures. The personal
savings rate in China is traditionally much
higher than in the United States, and cash
is still used to pay for most purchases. As
China expands into global markets, attitudes are beginning to change.

As a business owner, you will make
better financial decisions if you are
aware of how marketing and culture
influence your attitudes about money.

The relatively new field of behavioraleconomics has confirmed that our per-ceptual biases, learned behavior patternsand emotions—psychological factors wedon’t consciously control—drive ourfinancial decisions, and we make mis-takes counter to our long-term interests.Psychotherapist and money coachOlivia Mellan believes that everyone hasa “personality blind spot” and created atest for Money magazine to help you findand obliterate your own. (It is availableat http://money.cnn.com/2005/07/07/pf/money_type_0508/ index.htm.) Thetest is based on the Keirsey Tempera-ment Sorter, an established personalityprofiling system. A series of studies bySanta Clara University behavioralfinance expert Meir Statman and VincentWood, president of Advisor Team.com, aSan Francisco behavioral research andtesting firm, were used to help isolatecharacteristics of four personality types.Guardians are cautious with money; Arti-sans are daring; Idealists care more aboutother goals than money; and Rationalsmake most decisions by the numbers.

The website Practical Money Skills
for Life—Financial Literacy for Everyone, offers another tool to measure your
attitudes about acquiring, using and managing money. Take the Money Personality
Quiz at www.practicalmoneyskills.com/
personalfinance/money_personality/
index.php.

Being conscious about your attitudes
toward money is the first step in making better financial decisions for your
company. Next month, we’ll look at
some mistaken beliefs and unhealthy
attitudes about money and how you
can help your employees become more
financially conscious.

Are You Normal?The psychology of our relationship with money

DO YOU EVER WONDERif your attitudes about money are normal? Your family,
culture and level of financial literacy influence your relationship with money and
attitudes about accumulating, using and managing your finances. Your beliefs and
emotions affect financial decisions that seem logical and rational.